Bil­lions pour out of Stan­dard Life Aberdeen in dis­mal year

The Sunday Telegraph - Money & Business - - Front page - By Tom Rees

THE world’s top money man­agers, in­clud­ing Stan­dard Life Aberdeen and Black­rock, have seen bil­lions pour out of their ail­ing funds in their worst year since the fi­nan­cial cri­sis as they strug­gle to bat­tle wide­spread strife in the as­set-man­age­ment in­dus­try.

City fund gi­ant Stan­dard Life Aberdeen’s mar­ket value has halved dur­ing a rocky first year fol­low­ing an am­bi­tious £11bn merger.

Fees in as­set man­age­ment are un­der pres­sure from the rise of pas­sive in­vest­ment and zero-fee funds, while out­flows have ac­cel­er­ated in 2018 as mar­ket tur­moil prompts in­vestors to yank money out of eq­uity funds.

An in­dex track­ing shares in Wall Street’s mam­moth as­set man­agers has slumped to its low­est level in two years, suf­fer­ing its worst yearly slide since 2008. Black­rock, the world’s largest money man­ager, has shed a quar­ter of its value in 2018, $14bn (£11bn), while In­vesco’s shares have plunged 53pc. Stan­dard Life Aberdeen fin­ished 2018 the sec­ond-worst-per­form­ing stock on the FTSE 100 and re­vealed in Au­gust that £16.6bn had left the com­pany in the first half of the year. A volatile fi­nal quar­ter for mar­kets could ramp up the pres­sure on co-chief ex­ec­u­tives Keith Skeoch and Martin Gil­bert. RBC Cap­i­tal Mar­kets an­a­lyst Gor­don Aitken said Stan­dard Life Aberdeen’s div­i­dend is now less se­cure, put un­der pres­sure by the global slump on stock mar­kets.

Af­ter sell­ing its in­sur­ance busi­ness to Phoenix ear­lier this year, “the cash gen­er­a­tion of the busi­ness is now lever­aged to pre­vail­ing mar­ket con­di­tions”, he added.

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